Investing a small regular amount

Probi

Hi,
I am looking at starting to invest some money each month, to begin with I am only looking at between £25 - £50 per month, I have decided to go with the vanguard global all cap fund, but I'm stuck on which provider to use and I am getting a bit confused with all the different charging methods.

I know HL will allow a small amount each month but their charges are high.

My questions are:

Does it really matter where I put the money as it is such a small amount and any difference in charges would be minimal?

Is there somewhere better than HL for this type of investment / low monthly amount?

Thanks!

Costabit

ISA or SIPP or GIA ?

If you could stretch to £100 then The Vanguard platform would suffice. If not,Fidelity take £25 minimums with a slightly lower charge than HL . 

Probi

Thanks, I will be using an ISA

bd10

Here's an overview of platform costs:

https://www.theaic.co.uk/100-investment-in-open-ended-funds

https://www.theaic.co.uk/regular-monthly-investing-in-investment-companies

Vanguard itself is not included in the 100% funds summary.

Do charges matter? Yes, irrespective of small or large amounts. They eat into your returns.

As regards HL. They are expensive for funds but very competitive for shares/ETFs/ITs if one buys once and just uses the account for custody: max £45 / year for an ISA or none for a sharedealing account.

Have a look at AJ Bell. Annual fund custody 0.25%, £1.50 dealing charge, just an example.

ColdIron

On tiny sums it doesn't really matter

£50 pcm for 1 year with HL will cost you £1.35 all in. This is MSE but even so ...

Good website and customer service for a novice

Albermarle

Have a look at AJ Bell. Annual fund custody 0.25%, £1.50 dealing charge, just an example

So would be £1.50 charge every month + about a £1 in platform costs . So about 15X more expensive than HL

f not,Fidelity take £25 minimums with a slightly lower charge than HL . 

Fidelity has a minimum charge of £45 pa 

Costabit

Albermarle said:

Fidelity has a minimum charge of £45 pa 

Fidelity minimum charge will be waived if setting up a regular plan and will just charge 0.35% for funds

Alexland

ColdIron said:

On tiny sums it doesn't really matter

£50 pcm for 1 year with HL will cost you £1.35 all in. This is MSE but even so ...

Good website and customer service for a novice

But then having been a customer of both I can say Fidelity are equally good (better website, worse app) and over the years as the account balance grows the difference gets bigger so why pay 0.10% extra for HL?
Another option the OP might consider is to signup with cheaper Vanguard Investor at £100 pm then after a while lowering the regular contribution (have seen other forum users confirming this is possible) perhaps after 5 months when reaching the £500 minimum lump sum for opening an account if not regular investing. Or earlier if you think they won't notice.

MovingForwards

I manually pay in upto £15 a month into my vanguard S&S ISA and costs are negligible each quarter.

Michael121

Isn't vanguard the cheapest anyway for vanguard global all cap. I looked at my fund on fidelity and it would be way more expensive with 0.35 platform cost, 0.22 ongoing fee and a 0.12 transaction cost. I wasn't happy to see my fund go from 0.48 to 0.58 but when looking at fidelity that takes the biscuit.

Alexland

Michael121 said:

Isn't vanguard the cheapest anyway for vanguard global all cap.

Yes but the problem the OP has is that Vanguard Investor require either a £500 lump sum or a comitment to £100 per month to open the account.  Our point is that you can start at £100 pm then lower it or go with HL/Fidelity who accept a smaller regular contribution to open an account but they have higher ongoing charges. The fund's disclosure on internal transaction costs are the same wherever you hold it.